CFPB Asks Congress for ‘Clear Authority’ on Military Lending Act Compliance

The Consumer Financial Protection Bureau asked Congress for “clear authority” to supervise compliance of banking institutions under the Military Lending Act.  

The proposal ( and mirrors language in H.R. 442 (, which would amend the Consumer Financial Protection Act of 2010 to extend the supervisory authority of the to include assessing compliance with the MLA.  

The House bill was introduced by Rep. Andy Barr, R-Ky., on Jan. 10 and referred to the House Financial Services Committee.  

“The Bureau is committed to the financial well-being of America’s service members. This commitment includes ensuring that lenders subject to our jurisdiction comply with the Military Lending Act so our service members and their families are provided with the protections of that law,” said CFPB Director Kathy Kraninger. “That’s why I have asked Congress to explicitly grant the Bureau authority to conduct examinations specifically intended to review compliance with the MLA. The requested authority would complement the work the Bureau currently does to enforce the MLA.”  

The CFPB request seeks to clarify a seemingly vague interpretation of Bureau authority. Kraninger’s predecessor, Mick Mulvaney (now White House Chief of Staff), said the Bureau lacked authority to supervise lending to active duty service members and directed the Bureau to instead respond only to complaints from service members. Mulvaney’s interpretation sparked objections from Democrats and veterans’ organizations, who feared it would subject service members to predatory lenders.  

Congress passed the MLA in 2006. It originally covered “payday” loans, tax refund anticipation loans and car title loans, imposing a 36 percent rate cap for service members. A 2016 amendment extended protections to include credit cards, installment loans and overdraft lines of credit, banned mandatory arbitration and required disclosures for “consumer credit.”